🔗 Share this article Russia Seeks Staggering Amount in Damages from Clearing House Regarding Frozen Assets Russia's monetary authority has announced it is claiming damages valued at $230 billion against the financial institution Euroclear. This move is a direct response by the Kremlin against proposals to use frozen Russian sovereign funds to support Ukraine. The Legal Claim Based on accounts in Russian news outlets, the monetary authority filed a lawsuit last week for roughly 18 trillion roubles. This amount is equivalent to the stated $230 billion claim. EU leaders are set to determine in the coming days regarding a proposal to leverage around €210 billion in frozen Russian assets. The proposal involves granting Ukraine with a substantial loan to fund its defence and financial stability. The vast majority of these funds, amounting to €185 billion, are stored at the Euroclear clearing house in Brussels. Euroclear acts as the main custodian for the Kremlin's frozen financial reserves. Dispute on Ownership European Union officials have maintained that their proposal is on solid legal ground. Their position is based on the principle that ownership of the state assets still belongs to Russia, despite being it was immobilized in EU jurisdictions following the 2022 military offensive of Ukraine. Moscow, in contrast, has called any use of the assets as illegal appropriation. Authorities have threatened reciprocal measures, such as seizing EU corporate assets within Russia. Kirill Dmitriev, who has taken on a prominent role in peace negotiations, stated on X that Russia "will prevail in court" and retrieve its assets. He added that the EU, the common currency, and Euroclear "will suffer" from the plan. Strategic Positioning With statements seen as an attempt to create division between Europe and the United States, Dmitriev characterized the proposal as "a severe assault on property rights and the international reserves system established by the United States." The clearing house refused to comment on the latest lawsuit. The institution has previously stated it is facing more than 100 legal cases in Russian courts. Legal Hurdles Ahead Although judges in EU countries are unlikely to enforce judgments from Russian tribunals, experts expect Moscow to pursue enforcement in nations with closer ties to the Kremlin. "The Bank of Russia could try to implement a Russian court's decision against Euroclear in countries such as China, Hong Kong, the UAE, Kazakhstan, and other friendly states, provided that relevant holdings can be identified," commented a legal expert from an NSP law firm. European Safeguards European authorities indicated they are developing steps to deter other nations from assisting any Russian lawsuits against EU entities. They are also crafting safeguards to protect EU countries with investments in Russia from what they term "unlawful expropriation." The Proposed Loan Mechanism Under the complex scheme, the EU would provide an initial €90 billion loan to Ukraine, backed by the proceeds earned from the frozen assets at Euroclear. Importantly, Russia's ownership claim on the principal funds would stay untouched. Kyiv would solely be required to return the loan in the event that Russia agreed to pay compensation for the immense destruction inflicted during the nearly four-year conflict. Other Funding Ideas Belgium, backed by Italy, Bulgaria, and Malta, has asked the EU to consider an different method for funding Ukraine. This entails common EU borrowing to secure a loan, backed by unused funds within the EU budget. This alternative move, however, demands full agreement among all 27 EU countries. The Hungarian government, considered aligned with the Kremlin, has previously signaled its objection. Speaking on Monday, the EU foreign policy chief, Kaja Kallas, described the proposed loan scheme as "the most credible option" for supporting Ukraine. "The reparations loan is secured against the Russian immobilized funds, meaning it doesn't come from our public funds, which is equally significant," she stated. "It also delivers a powerful signal that when you do all this damage to another country, you must pay for the rebuilding."